Nigeria’s Eurobond Success Set to Boost FX Reserves to $45 Billion by Year-End
Nigeria’s foreign exchange reserves are on track to hit $45 billion by the end of 2025, buoyed by strong investor demand for the country’s recent $2.3 billion Eurobond issuance, investment firm CardinalStone has projected. The firm highlighted that the Eurobond sale, which saw a remarkable 5.5x oversubscription, signals renewed confidence in Nigeria’s macroeconomic outlook.
CardinalStone’s Macroeconomic Update noted that total bids for the Eurobond exceeded $12.7 billion, excluding joint lead managers’ participation, reflecting the robust appetite for Nigerian debt in international markets. “The high demand at the auction indicates strong investor confidence in Nigeria’s economic narrative, supported by recent credit rating upgrades that have lowered perceived sovereign risk,” the report said. The Eurobond coupons were set at 8.62% and 9.13% respectively.
The report further explained that the inflows from the Eurobond issuance are expected to strengthen Nigeria’s external position and stabilize the naira. “This development bodes well for FX dynamics, particularly in supporting reserve accretion and currency appreciation,” CardinalStone said. Part of the proceeds will be used to refinance a $1.1 billion Eurobond maturing on November 21, 2025, while also addressing potential budgetary gaps.
However, analysts have also highlighted potential risks. Comercio Partners described the Eurobond’s success as a positive signal for Nigeria’s fiscal health but cautioned that exchange rate volatility could undermine these gains. They warned that renewed FX instability could increase debt-servicing costs, as a weaker naira raises the domestic currency burden of external obligations.
As of mid-2025, Nigeria’s total public debt stood at N152.40 trillion ($99.66 billion), split between $46.98 billion in external debt and $52.67 billion in domestic obligations. While the debt-to-GDP ratio remains below the 40% sustainability threshold, experts stress that the high debt-service-to-revenue ratio limits fiscal flexibility. The Eurobond proceeds are expected to support the federal budget and refinance part of the maturing external obligations, including the $1.118 billion Eurobond due in November 2025.
source: punch